Why Real Estate is a Great Investment
If you’ve only thought of owning a house through the lens of it serving as your primary residence, then you may be missing out on some incredible opportunities. Amy Stockberger Real Estate follows all the market forecasts, locally and nationwide, and all signs indicate that home values will continue to rise.
Creating Equity Through Property Value
Investing in real estate is a great way to build equity and hedge against inflation and there are even some tax breaks for potential home buyers, owners, and sellers that will sweeten the deal. Real estate investments create equity as the value of the property increases. That can be due to the price of homes going up on their own or improvements that you make to the home that subsequently increase its value.
In addition to improvements, building equity can also be done by paying your mortgage to decrease the principal balance (aka amortization). If you do both, make valuable improvements and pay off more of the principal, sooner, you will have an incredible investment!
Rent Out Your Investment Property
Renting out your investment property might be a great hedge against inflation. With a lot of demand and not a lot of supply of houses for sale in Sioux Falls, SD, homes cost more but also rent and sell for more. There are more people who will be renting and thus the ability to keep your rental prices in line with inflation as the leases turn over. A shorter lease means that you can change your price to adjust to inflation.
Leverage The Tax Breaks Available
There are many tax breaks available for potential home buyers and homeowners. The mortgage interest deduction says that your taxable income is reduced by the amount of interest you paid on your mortgage that year, between $750,000 to $1 million, depending on when you bought your home. This is possible for primary and secondary homes.
Home Office Deductions
You may also qualify for home office expense deduction, mortgage points deductions, credits for energy efficiency improvements, a deduction for improvements made that are medically necessary, and rental expenses.
Embrace Market Trends
The homes for sale in Sioux Falls will continue to follow the market trends in rising values, scarcity, and increasing mortgage tax rates. Building a real estate investment portfolio helps to build equity and hedge against inflation. Contact Amy Stockberger Real Estate in Sioux Falls to help guide you through the process of building your real estate investments.
Ready to find a great investment property? Give us a call at 605-376-6780 or fill out the contact form.